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Family business: Passing the torch cuts both ways

From the common-carrier pioneers who forged the industry in the 1920s to the owners of freshly minted truckload and LTL fleets who have helped reshape it since the '80s, very often trucking is a family affair.Even as deregulation thinned the ranks of traditional regulated carriers, it gave rise to a new generation of trucking entrepreneurs. Just as the carriers that dominated trucking for six decades

David Cullen | Aug 01, 1998

>From the common-carrier pioneers who forged the industry in the 1920s to the owners of freshly minted truckload and LTL fleets who have helped reshape it since the '80s, very often trucking is a family affair.

Even as deregulation thinned the ranks of traditional regulated carriers, it gave rise to a new generation of trucking entrepreneurs. Just as the carriers that dominated trucking for six decades under the old rules had been, many of today's most successful fleets were started by one person with one to a handful of trucks. And just like their historical forebears, many of these new powerhouses remain family-owned and -operated.

Certainly, as in any mom-and-pop business, often the cheapest and least risky way to get started is by employing the people you know and trust the most - family and close friends.

But there can be a downside to this seemingly quick-and-easy approach - especially when the time comes to pass the torch to the next generation of top management.

That brings us to the question of what to do with the S.O.B. - the son (or daughter or other relation) of the boss. Whether keeper of the keys, heir to the throne, or the hired hand who has to deal with both, it's critical to recognize the pivotal and explosive role the S.O.B. plays in a family business. And if you work for a publicly held firm now, there's always the possibility you'll find yourself employed in a family-owned fleet one day, or even start one yourself.

Understanding and managing the relationship between family members (and/or close friends) and the fleet they operate is crucial for an orderly transfer of control when founders decide to step down.

But the process must begin long before the boss's retirement is imminent. To start at the beginning, both the elder and younger generations must decide if this is what they want. Only one thing's worse than grooming a successor who doesn't really want the mantle placed on his or her shoulders - plopping it on someone who has no more qualifications for it than a birthright.

And don't overlook what can happen between the first time the anointed ones show up for work and when they get the whole enchilada on their plate. Nothing can wreck the morale and detour the progress of an otherwise healthy business than the perception - real or imagined - that the boss is playing favorites with his or her kith and kin.

On the other hand, fleet owners need not set successors up for failure by demanding more of them than would be reasonably expected of anyone else on the payroll. By the same token, it would be the height of folly not to give "outsiders" an even playing field on which to compete with those held closest to heart.

>From visits to many family-owned fleets, I recall two distinct observations on family executives offered off the record by top managers who held their positions on merit alone.

The first best fits the cliche of the S.O.B. on the job. In fact, that was where I first heard those initials used in that context. The manager remarked that so-and-so, who had a vice-president-of-something title, was the son of the boss. "He's the S.O.B. We act like he matters, but we make sure he only handles stuff he can't screw up too much."

In the second instance, the executive I was interviewing said out of the S.O.B.'s earshot that he's "making a good name for himself here, despite having the same name that's on the door. In fact, I think he'd be a success anywhere."

A recent News York Times article on scions of major corporations provides further insight. Speaking of the next generation undergoing grooming, John Davis of the Harvard Business School remarked, "They need to earn respect, and they have to be humble. And if they do that, in 20 years they will break into the top rank with pride and a following."

Surely, a truly successful family business is rarely more family than business. Behind the office door, what affects the well-being of the business has to come first. For if the business thrives, the family behind it - and all the families who depend on it - will, too.